Competence: The two get-togethers must be of “sound intellect” to comprehend the seriousness of the situation and have an understanding of exactly what the necessity.
Legal Reason: The contract should be to get a legal function. It cannot be for anything illegal, like a marketing drugs and many others.
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It is essential which the contracting events have an intention to build legal relations. Consequently the events intend that legal effects are hooked up to their agreement.